NNPC reveals reason behind borrowing to acquire 20% equity in Dangote Refinery

The Managing Director of the Nigerian National Petroleum Corporation (NNPC), Mele Kyari, on Tuesday, June 29, explained why the national oil company is purchasing a stake in the Dangote oil refinery.

The refinery is expected to begin production in 2022 with an installed 650,000 barrels per day capacity.

It has been touted as a groundbreaking project for energy security in the country and for the African continent.

In May, the NNPC announced that it plans; to acquire a 20 percent equity stake in the private company led by billionaire Aliko Dangote.

Kyari made this disclosure during a guest appearance on Channels Television’s Sunrise Daily.

“There is no resource-dependent country that will watch a business of this scale; which borders on energy security and has implications for fiscal security of the country; and you don’t have a say,” Mr bsaid.

He argued that the decision was also driven by the profit potential of the refinery business.

“For the Dangote refinery, we are not taking government money to buy it; which is the mistake that people are making,” he said. “We are borrowing on the back of the cash flow of this business.

“We know that this business is viable, it will work and it will return dividends. It has a cash flow that is sustainable because the refinery business; in the short term, will continue to be sustainable.

“That’s why banks have come forward to lend to us; so we can take equity in this.”

“We are very proud that we did this. This is good for our shareholders; which includes all 200 Nigerians who will also be happily buying shares from this company if they had the opportunity. But now we have done on their behalf so that ultimately the value will come to all of us.

“But there is no way you can watch a business of this magnitude, of this sensitivity; to run without the involvement of the national oil company. No country does this.”